What Will Obama, Trump Do About Russia?

President Obama will almost certainly deliver a forceful response to Russia’s cyber-meddling in the 2016 presidential election before his term expires next month and Donald Trump moves into the Oval Office.

What that response will look like is hard to say, though sanctions are much more likely than harsher measures. Cyberdefense remains a weak spot for the U.S., and questions about the best way to respond to acts of online aggression have largely gone unanswered during Obama’s time in office, according to Claude Barfield of the American Enterprise Institute. Continue reading “What Will Obama, Trump Do About Russia?”

Previewing Donald Trump’s Energy and Environmental Policies

It’s safe to say that under President Donald Trump’s administration, a lot is going to change for energy and environmental policies after eight years of President Barack Obama. Trump’s early choices for Cabinet heads – an oil company executive at the State Department, a pro-drilling former Texas governor for the Department of Energy, an outspoken critic of Obama-era climate regulations to head the Environmental Protection Agency – strongly hint at a shift toward more development of natural resources and less-restrictive environmental rules. But what exactly will be changing, especially at the beginning of the Trump administration?

Walking Back Obama Priorities

Admittedly, I don’t have a direct line to Trump Tower, so I can’t ask the Donald himself what sorts of new policies we should expect when he takes office next month. But I have been speaking with folks who know his advisers, or represent influential business groups, or understand the industries most likely to be affected. Here are the highlights of their comments.

Christopher Guith, a senior vice president for energy policy at the U.S. Chamber of Commerce, believes the Trump administration will be busy undoing or modifying many of Obama’s policies and decisions. But some figure to change faster than others. Guith predicts that Trump will first go after certain executive orders Obama issued because they can be reversed right away by a new president.

That could include nixing the “social cost” of carbon dioxide and other greenhouse gases that Obama instructed federal agencies to weigh when considering the costs and benefits of regulations that limit emissions of such gases. In essence, assuming that emitting greenhouse gases imposes hefty future costs on society in the form of climate change makes the benefit of limiting such emissions higher, thus making the economic impacts of various regulations easier to justify. Guith believes that Trump will “take a knife” to this policy.

Also look for action on Obama’s recent order to halt the issuance of new coal mining leases on federal lands. That move cheered environmentalists who want to see the U.S. produce and burn less coal, but infuriated the coal industry and states with big coal mining operations. Guith expects the moratorium to be “eviscerated” within weeks or months of Trump taking office.

(Incidentally, reopening federal lands to coal mining might not make an immediate difference for the coal industry’s bottom line. As I recently wrote, the industry is poised for a rebound in 2017. But its upside is probably limited in the long run.)

A recently issued Obama regulation that would make coal mining permits harder to get in the name of protecting streams from mining-related waste could also be on the chopping block. The Republican Congress could employ the seldom-used Congressional Review Act to kill the regulation, since there will soon be a pro-coal Republican in the White House who would probably approve such a measure. (The CRA doesn’t have much teeth when one party controls Congress and the other has the presidency, since the president who issued the regulation in question can veto any bill from Congress seeking to overturn it.)

Finally, look for a change in the EPA’s approach to dealing with lawsuits from environmentalists. Guith says that the Obama EPA often declined to defend itself from such suits because it agreed with the gist of the complaints and was content to go along with the resulting court orders. That “sue and settle” mentality will be a thing of the past under Trump, he thinks. Instead, the EPA will vigorously defend its policies in court.

One thing that probably won’t change right away is the Environmental Protection Agency’s Clean Power Plan, which was designed to reduce carbon dioxide emissions from power plants. A legal challenge to the regs prompted the Supreme Court to order a halt to their implementation and give the Court a chance to hear the case. The outlook had been murky because of the death of Justice Antonin Scalia. But with Trump likely to appoint a conservative replacement, there is a good chance that the Supreme Court will eventually strike down at least part of the CPP, forcing the EPA to go back to the drawing board on regulating carbon. That’s a process that could take quite a while to play out.

Drill, Baby, Drill?

So much for what Trump might undo. What will he do?

To answer that, I checked in with David Holt, president of the Consumer Energy Alliance, a trade association composed primarily of big energy users, as opposed to producers. When I spoke with him in the immediate wake of Trump’s victory on Nov. 8, he said to look for the new president to expedite and support more energy infrastructure such as pipelines, and authorize more oil and gas drilling in areas such as the waters of the Gulf of Mexico. As Holt sees it, the widespread growth of hydraulic fracturing and horizontal drilling is nothing short of an “energy revolution” for the U.S. And he believes Trump fully intends to encourage that revolution to foster job creation.

White House support for expanded drilling and pipeline construction could set off a backlash among foes of such development. Holt’s primary concern is that, with the federal government less likely to limit or block energy-related development, activists in the environmental movement will resort to sabotage or civil disobedience to thwart new projects. The months-long protest of the nearly completed Dakota Access Pipeline System in North Dakota could be a sign of more-aggressive activism to come.

(Trump looks likely to grant the final easement needed to complete the DAPS project. And even the stillborn Keystone XL pipeline to connect Canada’s oil sands region with U.S. refiners could gain new life in the Trump administration. If so, buckle up for a major showdown between green groups and the White House.)

Speaking of environmentalists, I’ve been calling some of them to get their take on the incoming administration. So far, no one has been willing to talk, giving the impression that a lot of these folks are still sizing up Trump themselves and don’t yet know what to expect from him. Odds are they’ll become more talkative when Trump takes office and begins implementing policies that they disagree with. But here’s one early prediction: The confrontations will be frequent and acrimonious.

Cyberattacks Threaten the Internet of Things

The Internet of Things is giving cybercriminals millions of new vulnerable targets. Internet-enabled devices are plagued by shoddy security and lax regulation. Everything from baby monitors to the electric grid is susceptible to attack as millions more things get connected to the web—20 billion by 2020, up from 6 billion today, according to market research firm Gartner.

The number of connections will continue to soar as it gets cheaper and easier to slap a wireless chip and microprocessor on virtually any product. The ever-growing list of objects that have Wi-Fi includes drones, dolls, teakettles, televisions, lights, locks, refrigerators, thermostats, speakers, virtual reality goggles and bathroom scales. Continue reading “Cyberattacks Threaten the Internet of Things”

Steel Prices on a Sharp Upswing

Prices for steel will rise through early 2017 on the expectation of more infrastructure spending by the Trump administration and robust construction of hotels, office and school buildings. Over the longer run, though, production overcapacity in China will help temper increases.

The cost of steel plate products, used in bridge construction, pipelines, etc., are already up sharply—a 20% increase since the presidential election. Buyers are also shelling out 7% more for steel-reinforcing bar used in road and bridge and building construction. Also up: Prices for hot- and cold-rolled steel, used to make cars, appliances and more. Hot-rolled steel is up 14%; cold-rolled 11%. Meanwhile, scrap metal is selling for 16% more. Continue reading “Steel Prices on a Sharp Upswing”

Will antiestablishment fever sweep through Europe?

Europe is in for a bumpy ride next year, and U.S. business interests across the pond will feel the vibrations.

Populism is sweeping across the continent, generated by voter anger at the political establishment over weak economic growth, the scarcity of jobs, an anti-immigrant backlash and a perception that financial markets matter more to government leaders than the well-being of ordinary workers. It has just swept Italian Prime Minister Matteo Renzi from power and earlier did the same to British Prime Minister David Cameron—and it’s headed full bore for the European Union’s biggest and most influential economies. Continue reading “Will antiestablishment fever sweep through Europe?”

Trump Administration Will Dial Back Workplace Gains

The pro-labor regulatory agenda of the Labor Department will grind to a halt under President-elect Trump. Executive orders issued during the Obama Administration will be undone and enforcement actions against employers are likely to fall off dramatically.

At the top of the list of rules the Trump Administration will revisit is one on overtime. The rule was set to go into effect on Dec. 1, but a federal judge in Texas temporarily halted implementation. The matter is not expected to be resolved before the new administration takes office, which means that the rule can be pulled back and revised, or shelved. Odds are it will be modified, rather than scrapped, with the salary threshold in the new rule set at about $35,000, from $47,476 in the Obama rule. Continue reading “Trump Administration Will Dial Back Workplace Gains”

Will Trump Bring Better Days for Coal?

One of Donald Trump’s clearest campaign promises was to revive the beleaguered U.S. coal industry and bring back the thousands of mining jobs that have been lost in recent years. Trump pinned the blame for coal’s woes on the Obama administration’s pending climate change regulations, which would discourage burning coal to generate electricity. Trump isn’t in office yet, and his environmental policies are still taking shape. But the coal industry is already enjoying a bit of a comeback.

Natural Gas: Fueling a Coal Comeback

“Coal hit bottom in the spring of this year,” says Andrew Moore, managing editor of Platts Coal Trader at S&P Global Platts. Back then, coal consumption had plummeted and coal’s share of U.S. electricity generation had fallen to its lowest point on record. (It was around that time that we first spoke with Moore, who predicted that 2016 could mark the low point for the coal business.) Continue reading “Will Trump Bring Better Days for Coal?”